The All-Party Parliamentary Group (APPG) on Fair Business Banking welcomes the news that the FCA has confirmed that SMEs will be given greater access to the Financial Ombudsman Service (FOS). The new remit will cover businesses with an annual turnover below £6.5m with fewer than 50 employees, or an annual balance sheet below £5m. The FOS will now be able to award a maximum compensation of £350,000. According to the FCA, an additional 210,000 SMEs will be eligible to take their complaints to the Ombudsman Service.
The APPG is clear that an extension to the remit of the FOS is an excellent first step in reforming the dispute resolution landscape in the UK. The announcement shows that there is an acknowledgement that business need access to justice to have confidence, take risks and thrive in the UK economy.
However, the extension to the formal remit of the FOS is only part of the puzzle and in order to ensure that businesses are properly represented and have access to justice that is quick, cheap, efficient and crucially, accessible, the Government needs to introduce a complementary Financial Services Tribunal. This tribunal will be only mechanism, other than the courts, that will be able to compel witnesses, force the disclosure of information and hear judgements in a public court that can influence culture and behaviour.
The APPG is pleased to have the support from the FCA and from TSB as they recognise that these approaches are complementary and that an extension to the remit alone will only provide a piecemeal and temporary solution. Scandals such as RBS GRG and HBOS Reading, among others, have shown that it is only a Tribunal that can provide a holistic solution to the lack of redress mechanisms for businesses in the UK.
Kevin Hollinrake, Co-Chair of the APPG said: ““This is a good first step, but taken alone it is not enough. We will continue to work with Government, the Treasury to deliver a total solution to restore confidence and provide access to justice for UK businesses”.